CALC’s H1 net profit reaches HK$240.0m

Juliette O'Neill
By Juliette O'Neill August 25, 2016 17:55

CALC’s H1 net profit reaches HK$240.0m

China Aircraft Leasing Group’s (CALC) revenue and other income during the six months ended 30 June 2016 reached HK$1,026.6 million, representing an increase of 61.5% year-on-year. Profit before income tax was up by 112.4% year-on-year to HK$335.2 million, compared to HK$157.8 million in the year-ago period.

Profit attributable to owners of the company surged by 105.7% corresponding year to HK$240.0 million. Basic earnings per share increased by 98.0% corresponding year to HK$0.392 (1H 2015: HK$0.198).

The Board declared the payment of interim dividend of HK$0.14 per share in respect of the six months ended 30 June 2016 (1H 2015: HK$0.04), with an increase of 250%.

“We are delighted to deliver another strong profit performance in the first half of 2016. It is once again the outcome of our unique business model, backed by our continued globalisation efforts and financing innovation,” Mr. Chen Shuang, Chairman and Chief Executive Officer of CALC commented.

“CALC achieved a number of milestones during the Reporting Period. We have expanded our aircraft leasing business to new markets, allowing the Group to propel forward by capturing the growth momentum of the global aviation industry. Our advanced financing solutions and diversity of funding sources differentiate us from the peers and support our aggressive growth. Amongst the broad range of financing tools from the ingenious lease receivables realisation, our debut senior unsecured USD bonds and first syndicated loans to our first Japanese Operating Lease with Call Option (“JOLCO”) financing arrangement, we saw overwhelming responses from our banking partners and global investors, reflecting the market’s confidence in CALC’s unique business model and sustainable growth prospects.”

During the Reporting Period, CALC delivered seven aircraft to airline clients and grew its aircraft portfolio to 70 as at 30 June 2016. Among the seven aircraft delivery, two Airbus A320 aircraft were delivered to its first European client Pegasus Airlines. The first Airbus A320 to its first Southeast Asian Jetstar Pacific was also delivered in July 2016, taking CALC’s fleet size to 71 as of today and expecting to reach 81 aircraft by the year end. The Group has already signed and secured all lease agreements for the aircraft to be delivered in 2016.

Going forward, CALC says that it will continue to develop overseas airlines while further enhance its relationships with top-tier Chinese airline groups. In particular, it intends to further expand its client coverage into previously untapped markets, as demonstrated by its recent entry to the Japanese market through the collaboration with ANA. To further increase the number of overseas lease, emerging markets would also be one of the key focuses of the Group due to their respective high growth potentials.

To support CALC’s international expansion, the Group is set to explore a wider range of innovative financing alternatives: “We are continuous to explore more innovative and diversified financing channels to enhance our capital efficiency and profit prospect.”

In expectation of a fast growing leasing market, CALC is currently on schedule to reach 173 aircraft fleet by 2022 and the Group would further continue its fleet expansion plan in number and in variety, such as the latest MOU with COMAC over an order of 60 ARJ21-700 series aircraft signed in July 2016.

The group also intends to strengthen its position as aircraft full-life solutions provider through China Aircraft Disassembly Centre (CADC). The Group has started to build an aircraft disassembly centre at Harbin Taiping Airport in 2015. “The Group expects that, after the shareholding restructure of the CADC project in the second half of 2016, CALC would be able to leverage on its partners’ respective strengths and expertise in accelerating the commencement of the operation, eventually completing the final jigsaw of its value chain. It is expected that the construction of the CADC project would complete in 2018.”

Chen added, “CALC has been committed to becoming a full-value chain aircraft solutions provider with a worldwide presence. We are excited that the CADC project would soon be in operation, as it would complete our full value-chain services from aircraft acquisition and leasing, to fleet management, disassembly and parts distribution. Together with our globalisation strategy and fleet expansion plan, CALC is well-equipped to capitalise the favourable conditions of the aircraft leasing market. We will keep on delivering long-term value to our shareholders while retaining our leading position as one of the largest independent aircraft lessors in China.”

Juliette O'Neill
By Juliette O'Neill August 25, 2016 17:55